Dow Up 33 as Stocks Break Four-Session Losing Streak
The U.S. stock market rebounded Thursday in a broad-based though modest recovery from its recent slide, but fears linger about more selling ahead, analysts said.
The recovery occurred despite continuing declines in troubled Asian markets Thursday. European and Latin American markets ended mixed.
The Dow Jones industrial average closed up 33.63 points at 8,970.20, after losing more than 235 points in the previous four trading sessions. The Dow traded as low as 8,900 on Thursday.
In the broad market, advancing issues led decliners 1,943 to 1,066 on the Big Board, as volume slipped to 589 million shares from Wednesday’s high levels.
Smaller stocks, which have fallen much more sharply over the last month, showed bigger gains on Thursday. The Russell 2,000 index jumped 1.2% to 455.81.
Still, analysts described the session as lackluster overall, with investors unsure of the market’s near-term direction.
“The market is not fully corrected, and this is a temporary bounce,” said Frank Gretz, analyst at Shields & Co. “I don’t think we are out of the woods.”
“Investors are waiting for direction on two fronts--earnings and interest rates,” said Arun Kumar, strategist at Lehman Bros.
Weak U.S. corporate earnings, hurt in part by Asia’s woes, remain a big threat to Wall Street, analysts say. In addition, many investors still fear that the Federal Reserve Board might raise interest rates soon.
In Asia on Thursday sellers continued to chip away at key markets. The region’s stocks have plummeted anew in recent days--triggering global market turmoil--on mounting concern about the expected duration of the Asian economic crisis.
Hong Kong’s market fell 1.2% and Singapore dropped 2.6%. But South Korean shares gained 3.1% and Tokyo’s market was up 0.8%.
European markets, which tumbled Wednesday, remained unsettled by the latest Russian financial crisis. But Germany’s main index was off just 0.2% for the day.
Russian stock and bond markets rebounded Thursday when President Boris Yeltsin and government officials pledged to maintain the ruble’s value and defend the country’s battered financial system.
The U.S. market rebound, meanwhile, helped lift many Latin American stock markets. Brazil’s main index jumped 4.2%.
The bond market provided a good backdrop for stocks: The yield on the bellwether 30-year Treasury bond eased to a seven-week low of 5.82% from 5.84% at Wednesday’s close.
The Treasury sold new five-year notes at a yield of 5.575%.
In currency trading, the dollar continued to climb against the yen as concerns about Japan’s shaky economy deepened. In New York, the dollar closed at 138.81 yen, up from 137.4 on Wednesday. It was last at this level in August 1991.
Among Thursday’s highlights:
* Retail stocks, among the leading groups over the last month, rose further. Wal-Mart gained $1.06 to $55.44, Sears rose $1.56 to $61.75 and Home Depot jumped $2.75 to $77.
* Buyers sought some blue chips, including Goodyear, up $1.81 to $68.88; American Express, up $2 to $103.38; and McDonald’s, up $1.25 to $66.88. But Intel fell 81 cents to $73.50 on news that the government may bring anti-trust charges against the company.
* Utility stocks also gained sharply. The Dow utility index jumped 1.2% to 280.78. That may be a good sign for interest rates.
* Among beaten-down groups, home builders shot up. Kaufman & Broad surged $3.44 to $26 and Centex jumped $1.31 to $35.75.
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Market Roundup, D6
